“The market can stay irrational longer than you can stay solvent.”
– John Maynard Keynes
A rational Market lives on predictive pricing, the future incomes are discounted the moment it becomes public news. This makes it a heaven for the investors and a nightmare for the traders (as the fluctuations would be rational). However to the joy of most traders Indian Stock Market is anything but Rational.
Today AirDeccan is trading at 131.7 and this is inspite of the fact that Vijay Mallaya has announced an open offer that between 25th July to 13th Aug he shall buy 20% of Airdeccan Stocks at 155/- per share.
So for a rational investor this is 155-132 = 23/- per share or 17.5% returns in 6 weeks or 150% annualized assured returns.
Hence I would recommend all the rational investors to go bullish on this stock.